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HUD HOC Reference GuidePremium PricingChapter 2Mortgage and Credit Guidelines Page 2-06 Lenders are cautioned regarding the use of premium financing on a consistent basis with an actual or implied promise for refinancing at a lower rate. Premium rate financing must be disclosed on the HUD-1 Settlement Statement and the Good Faith Estimate (GFE). The HUD-1 Settlement Statement and GFE must specifically itemize charges being paid on the borrower's behalf. Premium pricing is to be used for financing the borrower's closing costs and/or prepaid items only. It cannot to be used for payment of debts, collection accounts, escrow shortages, missed mortgage payments, judgments, etc. Premium pricing is not considered as part of the 6% seller contribution limit. If there are remaining funds due the borrower from a premium pricing agreement, they must be applied to the borrower's principal balance. Please see: HUD Handbook 4155.1, Section 5.A
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![]() | Content Archived: November 5, 2012 | |
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